Jordan set to sign oil shale deal with Shell

Feb 25, 2009 01:00 AM

The Jordan government has concluded negotiations over an agreement to produce oil from oil shale at lower underground levels with Shell, a senior official said.
In December, the Natural Resources Authority (NRA) forwarded to the Cabinet the commercial deal it initially signed with the Royal Dutch Shell Oil Company to tap the Kingdom's vast amounts of oil shale.

Under the agreement, the first commercial quantities of oil extracted from oil shale will be produced within 12-20 years from the date the agreement is signed between both sides, Minister of Energy and Mineral Resources Khaldoun Qteishat told after the weekly Cabinet meeting.
Shell will use its patented In-situ Conversion Process, under which the ground is heated over several years, to extract oil shale in oil form. He said the initial figure of direct investments the project is expected to attract range between $ 20-25 bn, adding that Shell will spend around $ 430 mm during the project's initial phases of implementation, which focus on assessment of the project and its expected revenues.

The Cabinet referred the draft agreement to be studied thoroughly by an ad hoc ministerial services committee before it is discussed again by the Council of Ministers and then endorsed through constitutional channels, Qteishat said. Parliament is now in recess.
He added that according to the feasibility study, the project is expected to provide the amount of $ 200 mm annually, in addition to revenues generated from royalties and taxes on produced oil which will be calculated on the basis of market oil prices.

According to official figures, some 40 bn tons of oil shale exist in 21 locations near the Yarmouk River, Buweida, Beit Ras, Rweished, Karak, Madaba and Maan districts. Moreover, Qteishat said the Estonian company, Eesti Energia, with which the government signed an agreement in August 2008 to invest and produce electricity from burning oil shale is due to provide the government with a comprehensive offer to invest in this sector within 30 months of signing the agreement.
According to Eesti Energia's feasibility study, released earlier in May, there is a potential to produce 36,000 barrels of oil a day from just one of the Kingdom's locations rich in oil shale.

"Jordan has a very strong potential. There are plentiful resources, although it needs further studying and, importantly, it is easily mineable," Harri Mikk, a member of the Eesti Energia board of directors, said previously. "Jordan can easily produce hundreds of thousands of bpd from oil shale, perhaps a million bpd, potentially," he added.
Qteishat told the government has invited six international oil companies to invest in the extraction of oil through a process of distillation of oil shale quantities located on the surface of the earth.

Source / Jordan Times
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